The emerging technology analyst firm is forecasting the Australian IaaS market to grow by more than 60% to hit $612 million this year, with that number soaring to $1.049 billion by 2020.

More than half of the CIOs surveyed by Telstye said they were planning to invest more in IaaS in the next 12 months, with 34% of Aussie enterprises now opting for a cloud first policy in general.

Changing ICT priorities, with IT infrastructure management now equaling IT security as a top priority for Australian CIOs for the first time, according to Telsyte’s Australian Infrastructure and Cloud Computing Market Study 2017.

Big data analytics, storage, the internet of things, artificial intelligence and process digitisation are also driving demand for companies to modernise legacy systems and deploy new workloads, Telsyte says.

When it comes to choosing a managed service provider, Telsyte says reliability and support factors outweigh cost for organisations.

However, organisations aren’t going all in with cloud, instead favouring selective cloud use as applications like content management, backups, disaster recovery and software development are moved to pure clouds and managed service providers.

And it’s not just public cloud adoption finding favour with Australian organisations, with Telsyte reporting that 78% of enterprises are building or planning to build a private cloud.

Rodney Gedda, Telsyte senior analyst, says with more vitualisation and acceptance of cloud automation and self-service, the platform is set for a hybrid cloud future where workloads are provisioned in response to business and application demands.

“There are many applications where it still makes business sense to deploy on private infrastructure, but having the agility to pick and choose the right cloud service for any application is the big promise of hybrid cloud,” Gedda says.

Cloud containers, or operating system level virtualisation, which allows applications to be more portable across on-prem, MSP or pure cloud infrastructure, is also proving popular, with 70% of enterprises using or investigating their use.

Telsyte says networking-as-a-service is also growing alongside its server and storage counterparts, with nearly 30% of enterprises using some form of NaaS, from VPNs to firewalls to application acceleration.

“There are big opportunities for NaaS to improve operations and drive innovation as much as the complexity burden of network services is taken away from the customer,” Gedda says.